Jul 21, 2023

Malaysia: Southeast Asia's Evolving Animation Hub

Malaysia has become a quiet global animation giant, thanks to competitive incentives for domestic and foreign companies, a young and talented workforce, and progressive government cultural programs.

Experienced in both contract and original production, Malaysia has become the largest producer of animation in Southeast Asia and is considered a regional industry hub.

Malaysia's animation industry is valued at over $1.6 billion by 2020, with exports from the sector valued at over $285 million, doubling since 2014. Studios produced more than 65 original intellectual properties, which were sold in more than 120 countries, with exports valued at nearly $40.5 million.

Malaysia's leading position in Southeast Asia is largely due to the efforts of the Malaysia Digital Economy Corporation (MDEC), a government agency launched in 1996 and operating under the Ministry of Communications and Digital. The organization served to unify the region's digital industries, including animation, video games, VFX, and digital media, and was the catalyst for its exponential growth. [One of MDEC's most important initiatives, and of particular interest to the animation sector, is the Digital Content Creators Challenge, a platform for artists to hone their creativity and accelerate the development of digital content. This year, projects have been selected in four categories, and production will begin next month.

For more information on the Digital Content Creators Challenge, click here.

MDEC funds the projects primarily through digital content grants. When the program first began, MDEC often subsidized 90% of production costs. Later, this figure dropped to less than half as production companies and broadcasters became more confident in investing in animation in the region.

Malaysia offers a competitive 30% cash rebate to production companies producing animation in the region. Numerous global media outlets have benefited from this scheme, including Gaumont, Cartoon Network, and Hasbro.

The country also has a large, diverse, and well-trained talent base capable of doing almost any job imaginable; MDEC found in its latest Southeast Asian Animation Survey that studios in Malaysia and throughout Southeast Asia have the largest pool of animators, modelers, compositors, designers, producers, CG specialists, VFX, and other employees with a wide range of expertise.

Malaysian original IP success stories include Animonsta's "BoBoiBoy," Warnakala Studios' "Didi & Friends," Les' Copaque's "Upin & Ipin," Animasia Studio's "ABC Monsters" by Animasia Studio. These characters have become well-known in Malaysia and have found success in neighboring countries and abroad. Upin and Ipin was made into a feature film and became the first Southeast Asian animated film to be considered for an Academy Award.

In addition to being an artist- and studio-inspired phenomenon, Malaysian animation has also benefited from an enthusiastic fan base eager to see content produced by local studios. Four of the top ten Malaysian films of all time at the box office are animated: Upin & Ipin Keris Siamang Tunggal (10), BoBoiBoy Movie 2 (8), Ejen Ali: The Movie (7), and Mechamato Movie (5).

Malaysia is doing big things on its own, but is at the vanguard of a rapidly evolving and growing regional industry in Southeast Asia.

Southeast Asia has an animation tradition that goes back more than 80 years. Commercially, however, more than half of the region's animation companies have been in business for less than 10 years. That youth extends to the region's talent pool, with about 80% of all employees working in animation under the age of 35.

According to the most recent Southeast Animation Report, most studios in the region specialize in CG animation, but there is also a mix of 2D, VFX, video game, and motion graphics work.

According to Jared Lee of The Grim Film (horologist):

Most people overlook Southeast Asia because there are no "famous" IPs coming out of the region and it is still unknown. What the world doesn't know, however, is that many of the animators and illustrators of famous cartoons and triple-A games are made in this region. This proves that given the right opportunities, we can be on par with the rest of the world.

The Malaysia Digital Content Festival (MYDCF) is an annual gathering of developers and consumers in Kuala Lumpur. The gathering attracts more than 20,000 attendees and provides a behind-the-scenes look at more than 140 companies from around the world. This year's event will be held at the Kuala Lumpur Convention Center from September 27 to October 1.

Malaysian delegations often travel abroad as well. This year's delegation to the Annecy Festival was the largest ever, with representatives from 26 companies in attendance, along with MDEC CEO Mahadir Aziz. Malaysian delegates also worked with representatives from other ASEAN countries to organize two Southeast Asia Partners Pitch events.

One of the most important challenges facing the industry in Malaysia and greater Southeast Asia is size: according to MDEC, most studios in the region tend to be small to medium-sized, employing 50 or fewer people; studios with 100 or more employees account for 15 percent, and it is easier to take on contract work than to produce original films or series that require a larger workforce. Most of the outsourced work performed in the region comes from companies in the U.S., China, and Japan

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Nevertheless, original IP production is steadily growing in the region, and studios are growing and producing more in-house content thanks to the region's strong education and training programs In 2018, only about 33% of Southeast Asian countries were working on their own original IP were working on their own original IP. Today, that number is approaching 50%, producing more than 65 original animated features that have been sold to more than 120 countries.